ECB President LAGARDE said on Thursday governments may be inclined to increase
control over monetary authorities, and that preserving central bank independence
is increasingly important amid a more challenging global order. She warned the
issue is now not just legal independence but the credibility needed to exercise
it, saying trust takes long to build and can be lost instantly. LAGARDE said
that over the past decade de facto independence has deteriorated at nearly half
of central banks in countries representing about 75% of global GDP. She added
policymakers face a tougher backdrop—more frequent supply shocks, rising fiscal
pressures and falling public trust—making credibility earned through action
decisive.
